Stock Market News

Australia’s CBA Lags Bank Stocks as Demand Fears Outweigh Profit

2022.08.10 03:54

Australia’s CBA Lags Bank Stocks as Demand Fears Outweigh Profit

By Ambar Warrick 

Investing.com– Shares of Commonwealth Bank Of Australia (ASX:CBA), the country’s largest lender, slipped on Wednesday as a warning over slowing demand for home loans outweighed a strong annual profit.

As of 2014 ET (0014 GMT), CBA’s shares fell 0.7% to 100.60 Australian dollars (A$). In contrast, those of its “big four” peers were up between 0.5% to 1.1%. 

National Australia Bank Ltd (ASX:NAB) led gains among the lot, up 1.1% as it recovered from sharp losses in the prior session. 

CBA’s losses come as CEO Matt Comyn warned that despite a strong fiscal 2022, the bank expects headwinds to its lending business from rising inflation, which has dented consumer sentiment. 

“Inflation is high, and we have seen a rapid increase in the cash rate… We expect consumer demand to moderate as cost of living pressures increase,” said Comyn. 

Net Cash profit for the year to Jun 30, 2022, rose 11% to A$942 million Australian dollars. The bank experienced a sharp increase in home loans- up 7%- amid record-low interest rates. But this trend is expected to slow after a series of rate hikes by the Reserve Bank in 2022, which CBA passed onto customers. 

CBA’s net interest income rose 1% to A$19,473, while net interest margin- a closely watched measure of profitability- fell 18 basis points to 1.90%. 

But despite a boom in the first half of the fiscal year, CBA is now experiencing a freeze in home loans from surging interest rates, rising inflation and weak consumer sentiment. 

The Reserve Bank of Australia hiked interest rates by a combined 175 basis points this year, as it looks to combat inflation nearing its highest level in nearly 30 years. 

In its latest meeting, the bank warned that inflation would likely prove to be stubborn, and that more rate increases were warranted. This is likely to keep the home loans market subdued, pointing to more pressure on lenders despite improving margins. 

NAB had logged a 6% gain in quarterly earnings on Tuesday. But shares of the firm plummeted, dragging its peers lower after it flagged increased costs through the remainder of the year. 

 

Source

Related Articles

Leave a Reply

Back to top button
bitcoin
Bitcoin (BTC) $ 76,109.39 1.14%
vested-xor
Vested XOR (VXOR) $ 3,405.08 99,999.99%
ethereum
Ethereum (ETH) $ 2,920.97 7.74%
tether
Tether (USDT) $ 1.00 0.08%
solana
Solana (SOL) $ 199.52 6.78%
bnb
BNB (BNB) $ 602.38 1.13%
usd-coin
USDC (USDC) $ 0.998954 0.12%
xrp
XRP (XRP) $ 0.556798 3.18%
dogecoin
Dogecoin (DOGE) $ 0.195227 0.34%
staked-ether
Lido Staked Ether (STETH) $ 2,918.97 7.65%
cardano
Cardano (ADA) $ 0.413594 14.06%
tron
TRON (TRX) $ 0.16031 1.06%
the-open-network
Toncoin (TON) $ 4.96 3.73%
wrapped-steth
Wrapped stETH (WSTETH) $ 3,458.06 7.65%
shiba-inu
Shiba Inu (SHIB) $ 0.000019 1.94%
avalanche-2
Avalanche (AVAX) $ 27.83 2.45%
wrapped-bitcoin
Wrapped Bitcoin (WBTC) $ 76,148.40 1.28%
weth
WETH (WETH) $ 2,923.40 7.79%
chainlink
Chainlink (LINK) $ 12.77 5.50%
bitcoin-cash
Bitcoin Cash (BCH) $ 381.11 0.72%
sui
Sui (SUI) $ 2.34 2.66%
polkadot
Polkadot (DOT) $ 4.19 2.01%
leo-token
LEO Token (LEO) $ 6.25 0.34%
usds
USDS (USDS) $ 0.999169 0.37%
litecoin
Litecoin (LTC) $ 72.30 2.14%
wrapped-eeth
Wrapped eETH (WEETH) $ 3,074.06 7.71%
uniswap
Uniswap (UNI) $ 8.91 4.71%
near
NEAR Protocol (NEAR) $ 4.30 2.66%
aptos
Aptos (APT) $ 9.90 4.00%
pepe
Pepe (PEPE) $ 0.000011 12.45%
bittensor
Bittensor (TAO) $ 514.18 2.71%
internet-computer
Internet Computer (ICP) $ 7.87 0.28%
fetch-ai
Artificial Superintelligence Alliance (FET) $ 1.42 1.39%
dai
Dai (DAI) $ 0.999011 0.14%
stellar
Stellar (XLM) $ 0.102811 6.27%
ethereum-classic
Ethereum Classic (ETC) $ 20.28 3.63%
monero
Monero (XMR) $ 164.04 1.65%
kaspa
Kaspa (KAS) $ 0.115421 3.45%
ethena-usde
Ethena USDe (USDE) $ 0.99975 0.22%
whitebit
WhiteBIT Coin (WBT) $ 19.66 1.97%
aave
Aave (AAVE) $ 181.78 3.00%
polygon-ecosystem-token
POL (ex-MATIC) (POL) $ 0.348588 4.82%
blockstack
Stacks (STX) $ 1.70 0.29%
crypto-com-chain
Cronos (CRO) $ 0.093342 9.37%
dogwifcoin
dogwifhat (WIF) $ 2.48 2.93%
okb
OKB (OKB) $ 40.50 2.97%
first-digital-usd
First Digital USD (FDUSD) $ 0.994308 0.63%
arbitrum
Arbitrum (ARB) $ 0.585546 6.94%
filecoin
Filecoin (FIL) $ 3.79 2.58%
mantle
Mantle (MNT) $ 0.66235 10.63%